The traditional industry in Japan, especially Kimono industry, is in danger of survival. Traditional crafts are sold with added some value because they are mainly handicrafts and they cost more than mass-produced products. Kagayuzen, one kind of the formal Kimono, also add the value as a luxury product and this high value-added strategy has succeeded until 1990s. However, the number of customers who can buy them at high prices has decreased, and the industrial scale of Kagayuzen has been sluggish to one-tenth of its peak in 2019 because the needs of consumers have changed due to the changes in social conditions. Nowadays consumers want to wear Kagayuzen in a wider situation, not just in formal situations. Nevertheless, the Kagayuzen industry continues to focus on the high value-added strategy, targeting a very limited number of consumers because it is difficult for the industry to accept new value because the mechanism of the process of value-making is fixed. Therefore, this paper defines a mechanism making traditional crafts valuable as “Institutional System” to clarify that the reason why the traditional industry fell into a crisis. Finally, this paper clarified that the “Institutional System” has been effective in increasing value of traditional products, so it is deeply related to the cause of the rigidity of the system, and it makes the traditional industry lose their creativity.